What Foreclosure Does to Your Credit Score — And Why It Doesn’t Have to Be the End of the Story | Petroff Amshen LLP

May 1, 2025

What Foreclosure Does to Your Credit Score — And Why It Doesn’t Have to Be the End of the Story

Foreclosure can severely damage an individual’s financial future — but it doesn’t stop there. It also disrupts families, destabilizing entire households. However, with the right legal review, that damage can often be prevented or corrected.

When a homeowner falls behind on mortgage payments and the bank attempts to take possession of the property, the consequences can last a long time. One of the most immediate and devastating impacts is a significant drop in the person’s credit score, often by up to 100 points. This foreclosure remark can stay on the file for seven years, affecting almost every aspect of someone’s credit life, from renting an apartment to qualifying for a credit card, or even passing background checks for employment.

However, foreclosure isn’t always the end of the story. In many cases, a thorough legal review of the foreclosure process can overturn the legal action, saving the property. Likewise, a careful review of the credit report might uncover errors or violations that could have contributed to a lower credit score.

What Foreclosure Does to Your Credit Score — And Why It Matters

Foreclosure is one of the most damaging entries that can appear on a credit report. Credit agencies view it as a serious failure to pay debt, which signals high risk to future lenders. Beyond the rate score, this event often results in limited access to affordable housing, higher interest rates, and lost financial opportunities.

Yet, many consumers are unaware of what actually happened during their foreclosure. From incorrect notifications to rushed legal procedures, there are many ways a foreclosure can be mishandled.

A Legal Review Can Protect Your Rights

While some suggest simply "waiting it out," we don’t. Our attorneys emphasize that reviewing the foreclosure process—step by step—is essential to uncover any procedural errors or violations that could invalidate the foreclosure. New York’s Foreclosure Abuse Prevention Act offers added protections, ensuring that lenders follow fair, transparent procedures and respect consumer rights. If these rights were violated, we’ll identify the issue and take appropriate action once the legal window allows.

A Foreclosure Defense Attorney Can Fight for Your Home — Don’t Go at It Alone‍

Up to 67% of homeowners facing foreclosure receive no legal assistance. Having an attorney in your corner can make a significant difference. Foreclosure defense attorneys are key in ensuring that homeowners' rights are protected and that the process is handled correctly. Don’t face foreclosure alone — reach out to a legal professional to safeguard your future.

A foreclosure may be removed from a credit report after seven years, but consumers don’t have to wait that long to take action

‍Beyond the Foreclosure: Repairing Credit and Rebuilding Stability‍

Foreclosure may appear on your credit report for up to seven years, but legal action can make a difference much sooner. Under the Fair Credit Reporting Act, consumers have the right to dispute inaccurate, incomplete, or unverifiable information on their credit reports. This includes:

Incorrect foreclosure dates

Misreported balances

Outdated or erroneous information that negatively affects your score

A comprehensive review of your credit report could uncover issues that, once corrected, could lead to an immediate improvement in your credit score and a faster recovery of your financial health.

Foreclosure Defense Attorneys with a Long-Term View

The emotional toll of foreclosure often leads homeowners to accept it without questioning. Feelings of shame, confusion, and fear of further legal complications prevent many from seeking help.

Petroff Amshen LLP’s legal approach is focused on immediate defense and long-term protection. As experienced foreclosure defense attorneys, the firm investigates not only the legality of the foreclosure itself but also its ongoing repercussions, particularly how it has affected a client’s credit profile.

The legal team takes a comprehensive approach: Was the foreclosure properly executed? Were the consumer’s rights violated? If so, Petroff Amshen LLP employs strategies to directly address those issues, combining litigation, when necessary, with informed legal action.

Why Timing Is Crucial

Addressing foreclosure-related issues early on can dramatically improve outcomes. While no action can remove the foreclosure from the credit report before the expiration period has passed, we can review the entire credit report and identify potential errors that could be challenged from any other credit accounts to give your credit score a boost. By taking swift action, individuals often unlock the door to refinancing, rebuilding, and restoring access to basic financial tools.

A Comprehensive Legal Review to Mitigate Further Damage

Petroff Amshen LLP encourages anyone affected by a foreclosure to seek a legal review, not only of the foreclosure event itself but of its ongoing impact. While foreclosure may seem like the final word, it doesn’t have to define someone’s financial future.

Credit Repair After Foreclosure

A foreclosure may be removed from a credit report after seven years, but consumers don’t have to wait that long to take action. The early process should involve reviewing the report for inaccuracies and disputing any errors that could be impacting the credit score. Even before the seven-year mark, correcting additional issues can support credit repair and help restore their financial stability.

Under the Fair Credit Reporting Act, consumers have the right to dispute any information on their credit report that is inaccurate, incomplete, or unverifiable. T This includes disputing the presence of foreclosure if it is being reported for more than seven years and any other wrong remarks on someone’s credit accounts. If inaccuracies are found and reported, this could lead to an immediate improvement in the consumer’s credit score, allowing them to rebuild their financial standing faster.

Petroff Amshen LLP encourages homeowners to act quickly to ensure any potential damage to their credit profile is minimized. A legal review not only helps address immediate issues but also sets the foundation for future financial success.